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Over the past year, there has been an outpouring of appreciation for NHS staff, carers and other workers delivering key public services under extraordinary strain. At the same time, the pandemic has exposed a certain lack of resilience within these services, compromising our ability to respond to Covid-19 in an effective and fair way, even despite the best efforts of public servants.
The task beyond Covid-19 is to rebuild public services so they are better equipped to handle future challenges - both acute shocks, such as another pandemic, and chronic pressures such as our ageing population. Public services will also play a crucial role in achieving long-term shared national goals, such as decarbonisation or tackling regional inequality, and should be managed with these in mind. Other insights from our experience of Covid-19, including the centrality of digital access and data governance, should shape future public service provision.
The resources in this section bring together evidence on pre-Covid trends in public service provision - spending cuts, outsourcing, centralisation - and suggestions for how to rebuild these services in the wake of crisis.
Many argue that public services and social security must complement each other and be seen as part of the same system - please see our “Improving work and welfare” pages for further relevant resources.
The Institute for Government’s report How fit were public services for coronavirus? found an acute lack of resilience across the NHS, local government, education and criminal justice systems, and blame underfunding over the previous decade.
The House of Lords Public Services Committee’s report A critical juncture for public services: Lessons from Covid-19 identified a number of weaknesses in public service provision during the pandemic - inequality of access, over-centralisation, lack of integration - and outlines recommendations for reform.
Innovator and social entrepreneur Hilary Cottam argues our present welfare systems are unfit for the fifth technological revolution, and offers a vision for a sibling social revolution - Welfare 5.0 - with profound implications for public service provision.
The Women’s Budget Group Commission on a Gender-Equal Economy has laid out the roadmap for a creation of a “Caring Economy", including recommendations both for particular public services (e.g. social care, health, housing) and for how public services are treated within the UK’s broader economic policy framework.
Extending the principles behind the NHS - universal, free at the point of need care - to other public services is the rationale behind the Universal Basic Services proposal. See our analysis here.
The SocialGuarantee.org sets out a policy framework in which every person’s access to life’s essentials is enshrined as a right and delivered through reimagined public services. The site curates a range of resources, including examples of best practice from around the world in provision of services such as adult social care, transport, housing, internet access, and childcare.
In the decade before the pandemic, public services saw "the longest sustained squeeze in public spending on record”. Analysis from the Institute for Government found that underfunding left “public services entered the crisis with ailing performance levels, severe staffing pressures and having underinvested in buildings and equipment”, undermining resilience in these services by the time the pandemic hit.
Rebuilding resilience in public services will require increases in their funding. Our ageing population is also likely to require higher spend per capita on health, care and other services to maintain service quality. There is also popular demand for spending more on public services.
Supporting a higher level of spending on public services will require tax reform, both to raise sufficient revenue and to ensure it is raised fairly. Others, including the Financial Times editorial board, have argued policymakers “must see public services as investments, rather than liabilities”, with implications for how spending on public services is treated within fiscal frameworks.
Please see our section on taxation for more relevant resources.
The Institute for Fiscal Studies (IFS) found day-to-day spending on public services was cut by 13% per person over the decade to 2019/20.
Updated IFS analysis finds the Chancellor’s 2021 March Budget implies cuts to public spending of £14 to £17bn next financial year relative to pre-Covid plans - which themselves would not have reversed the cuts over the previous decade. For this reason, IFS Director Paul Johnson has called the Chancellor’s medium-term spending plans “implausibly low”.
Anita Charlesworth, Head of Research at the Health Foundation, brings together evidence on underinvestment in the NHS, social care and public health prior to the pandemic. She argues this, alongside overly centralised decision-making and a reliance on outsourcing within due diligence, lies behind the UK’s high Covid-19 death toll.
A July 2020 survey by the National Centre for Social Research (NatCen) found majority support for increasing tax and spend on health, education and social benefits, as there has been since 2017.
The Women’s Budget Group calls for spending on key public services (health, care, education) to be seen as investment in social infrastructure. They argue that restricting the definition of investment to spending on physical infrastructure reflects a gender bias in economic policymaking and leads to underspending on vital public goods. The Biden Administration has allocated $400bn to investment in health and care systems in the American Jobs Plan, as an indication of this shift.
The United Kingdom - especially England - has a highly centralised political system and economic geography. Decision-making power is far more concentrated in central government than in comparable Western countries, and regional inequalities in income, wealth and health are almost uniquely pronounced.
The centralised management of public services has been a contentious topic during the pandemic. Many have argued the Government’s “over-centralised” response impeded effective provision of services, particularly with respect to public health and test-and-trace.
Covid-19 has also drawn attention to the financial fragility of many local authorities, which impedes their ability to provide public services. In 2020/21, English local authorities’ spending power was 26% lower than a decade prior. This period also saw population growth of 7%, rising demand and cost pressures, and new statutory duties for councils relating to public health, social care and homelessness.
For more relevant resources, please see our sections on health and social care, stronger local economies and regional inequality.
The National Audit Office finds the financial position of local authorities “a cause for concern”. On top of pre-pandemic funding pressures, they find a £600m shortfall between Covid-related financial pressures and government support and that 94% of single tier and county councils surveyed expected to cut services next year.
The House of Lords Public Services Committee criticised the “over-centralised” delivery of public services and argued the pandemic has “demonstrated that certain [services] are best delivered locally”. The Committee also highlighted how underfunding has led to a lack of resilience in local authorities.
The Economist reviewed how centralisation, the 2013 restructuring of the health service, and lack of local power impeded the UK’s public health response.
Think tank Reform proposed radical devolution of public service commissioning in their 2017 report Vive la devolution, with recommendations including devolving 95% of NHS England’s budget.
The Centre for Local Economic Strategies (CLES) response to Labour’s 2019 Democratising Local Public Services report touches on a number of relevant themes, including insourcing and the role of cooperatives, community businesses and social enterprise in local public service provision.
A string of high-profile failures and corruption allegations (e.g, Test-and-Trace, Ayanda Capital) during the Covid-19 has increased scepticism surrounding the value of and processes surrounding the government’s use of outsourcing and procurement.
In the decades prior to the pandemic, the government had come to increasingly rely on private providers to deliver public services, leading to a fall in the public sector’s capacity to deliver services ‘in house’. In 2018, following the Carillion scandal, the auditor general claimed that “there are lots of areas where the government does not have the capacity to do anything else but outsource”.
The result is a “gravy train”, whereby an over-reliance on the private sector and flawed contracting models mean that consultants and private companies like Carillion can make huge sums of money from government contracts, even if they deliver poor quality services. This is especially true during a shock of the magnitude of Covid-19, when services need to be rolled out quickly. Many have called for wholesale reassessment of the Government’s handling of private services providers following the pandemic.
See also the section below on public sector pay and recruitment for relevant resources on rebuilding public capacity.
The Institute for Government claims that insourcing of public services “can improve quality, increase reliability, and save money” and lays out guidelines for when and how public services should be brought back into government hands (see also their report on the government's failure to learn the lessons of the Carillion scandal).
UCL Professors Mariana Mazzucato and Rainer Kattel argue that, among other things, an over-reliance on outsourcing in recent decades has led to a collapse in UK public sector capacity and expertise, undermining our ability to respond to shocks on the scale of Covid-19.
The British Medical Association has published excellent overviews of the acceleration in outsourcing within the health service during Covid-19 and the windfall gains to private providers, despite a “litany of mistakes” (see also: Drs Rebecca E Glover and Nason Maani’s “Have we reached ‘peak neoliberalism’ in the UK’s Covid-19 response?” for BMJ Opinion).
The Centre for Local Economic Strategies’ (CLES) Neil McInroy and Tom Lloyd-Goodwin argued the present approach to outsourcing has failed, and that a combination of insourcing and a system of “social licensing” - criteria that non-government providers of public services must meet - would improve provision.
Corruption researcher Lucas Amin has written for openDemocracy on the need to change transparency law to allow for proper external scrutiny of public-private contracts.
The IPPR’s Grace Blakeley and Harry Quilter-Pinner examined financialisation and outsourcing within care, arguing that continued private provision could lead to lower quality of service and financial instability (see also Common Wealth’s report on an industrial strategy for the care sector).
In the decade before the pandemic, public sector pay fell behind the rising cost of living, so that in real terms public sector workers earned £900 less per year in 2020 than they did in 2010. Some workers have seen particularly sharp falls in pay, including teachers (£1349), local government residential care workers (almost £1900), firefighters (£2508) and early career nurses (over £3000).
In this context, the Government’s recent restraint on public sector pay has attracted criticism. First, many claim it undervalues the work of millions of public sector key workers who have already seen a decade of pay cuts. Second, economists of all stripes have questioned the wisdom of cutting wages while simultaneously trying to stimulate economic recovery. Third, some fear public sector pay restraint will exacerbate inequalities, as women and those living in poorer regions of the UK are disproportionately likely to work in the public sector.
The longer-term issue is building public sector capacity. Before the pandemic, public sector wages had fallen to a 25 year low relative to the private sector. At the same time, funding cuts have led to increased pressures on workers, further exacerbating recruitment and retention difficulties. In the short-term, pain in the private sector labour market and heightened interest in public service are likely to ease recruitment problems. Without efforts to reverse longer-term trends, however, we risk further undermining public sector expertise - leading to increased reliance on outsourcing - and failing to rebuild resilient public services after Covid-19.
The House of Commons Library briefing on public sector pay outlines how pay is determined for different workers, and gives details of Government policy and trends relating to public sector pay.
The Trades Union Congress report on decent pay and secure work for key workers contains analysis and recommendations relating to the public sector workforce, which employs around half of all key workers.
Prior to the pandemic, recruitment and retention challenges in health and social care led to a combined shortage of over 222,000 full-time equivalent staff across NHS England and adult social care.
The IPPR's State of health and care: The NHS Long Term Plan after Covid-19 report recommended a package of six changes that together form a “£12 billion blueprint to ‘build back better’ health and care”, including an urgent 5% pay rise for NHS staff, social care free at the point of need for all and a living wage guarantee for care workers and changes to immigration rules
The IPPR’s Parth Patel and Chris Thomas outlined what ‘build back better’ should mean for an “exhausted and over-stretched” healthcare workforce, drawing from YouGov polling to inform its practical recommendations.
Clare Foges, Times columnist and David Cameron’s former speechwriter, has written on the need to restore public sector expertise to “stop the coronavirus gravy train” - the millions of pounds spent on outsourcing and consultants due to a lack of in house capability.
